Fixed rates flexible at St George
St George Bank - which already boasts the most aggressive home loan pricing among the larger banks -further reduced margins at the end of last week to stake out a position as the price leader, at least on fixed rate loans.
The bank lowered three-year and five-year fixed interest rates to 7.15 per cent for loans of $200,000 or greater and for new customers to the bank.
These lower rates may only be available via brokers with the higher rate of 7.35 per cent still listed at the bank's website at the weekend (and also at consumer banking portal InfoChoice).
St George has consistently priced fixed interest mortgage rates at finer rates than any of the big four and major specialist home loan lenders Aussie, Rams and Wizard so far this year, according to InfoChoice data.
Even at the rate of 7.35 per cent (charged to customers taking out loans directly through the bank) St George had set the rate on three and five year fixed loans that were the lowest or equal lowest of its fore mentioned competitors.
From mid 2005 to the end of 2006, St George priced competitive interest rates for five years, leading its rivals for the majority, but was much less competitive in the two-year bracket where Wizard led the market and three years where NAB provided the best rates for the majority.
For the final quarter of 2006, the bank was off the pace for two and three year loans by between one and eleven basis points, but very competitive in five years as the lowest during October and November, and only one point adrift for December.
Of the big banks, ANZ provides the least competitive rates with one, two and three years charged at 7.45 per cent, rising to 7.55 per cent for years four and five, with a maximum loan to valuation ratio of 95 per cent.
National is the only top five bank allowing a LVR of 100 per cent, with rates fixed at 7.44 per cent for years one through five providing customers borrowing the total house price a reasonable deal.
St George and the Commonwealth have a LVR of 95 per cent, with Westpac the odd bank out on 97 per cent.
The fixed mortgage loan fee structure of the big four and St George remains predictably uncompetitive, with a monthly fee of either eight or ten dollars and an application fee of either five or six hundred.
In the 2007 half-year report St George noted their home loan book is improving momentum, but growth for the twelve months was below system at 10.2 per cent, compared to the mortgage market average for the year of 14 per cent.
Comparing non-bank specialist home loan lenders Aussie, RAMS and Wizard, St George still comes out on top for 2007, according to InfoChoice data.
Aussie four and five year fixed loans are the most competitive at 7.39%, with one to three year loans at the higher rate of 7.49%. RAMS is at 7.45 per cent while Wizard recently lifted its two, three and five-year fixed rate loans to 7.5 per cent.
The main benefit of the specialist lenders is there are no ongoing monthly fees, with the application and settlement fee total comparable to that of the bigger banks.
For each month of 2007, St George has consistently provided either the lowest or equal lowest fixed home loans for three and five year terms compared to the big four banks and three previously mentioned home loan specialists.
The most competitive rates in town for three and five year fixed loans can be found with some of the smaller and lesser known lenders such as Sapphire Mortgage Services and Starfund, while ANZ's one direct brand is also priced at the low cost end for this segment.